Bloomberg News

Russian Railways May Sell Entire 50% Stake in TransContainer

September 30, 2011

(Updates shares in fifth paragraph.)

Sept. 30 (Bloomberg) -- OAO Russian Railways, which is selling some of its largest subsidiaries this year, may offer investors its entire 50 percent stake in London-listed cargo unit OAO TransContainer, a deputy economy minister said.

The ministry has spoken to potential investors and most of them favor the sale of a majority stake rather than the planned sale of 25 percent, Stanislav Voskresensky said yesterday by phone from Moscow. Russia’s railway monopoly owns 50 percent plus one share in Moscow-based TransContainer.

“The sale of a controlling stake would allow Russian Railways to maximize its revenue,” Voskresensky said. “This proposal has been submitted for consideration by the government.”

Russia is selling stakes in government-owned businesses as President Dmitry Medvedev seeks to reduce the state’s role in the economy. Other companies whose shares will be offered to investors include the country’s biggest oil producer OAO Rosneft and its largest lender OAO Sberbank.

TransContainer held an initial public offering in Moscow and London in November 2010, raising about $400 million with Russian Railways selling a 35 percent stake. The shares have dropped 2.1 percent this year and were up 3.3 percent at 11:26 a.m. in London today, valuing the container-shipping company at $1.3 billion.

Planned Auction

Russian Railways had planned to auction 25 percent of TransContainer by September, senior vice president Valery Reshetnikov said in May. Reviewing the size of the stake may delay the sale until next year, hampering plans by Russian Railways to raise 349 billion rubles ($10.9 billion) for its 2011 investment program, Chief Executive Officer Vladimir Yakunin said Aug. 5. The company also plans to offer 75 percent minus two shares in cargo carrier Freight One at a starting price of 125.4 billion rubles.

It’s up to the government “to decide on the sale and size of the stake,” Russian Railways spokesman Dmitry Pertsev said.

The state monopoly’s board approved the starting price of the 25 percent stake at 10.7 billion rubles in April. The price may be revised, senior vice president Vadim Mikhailov said Aug. 31.

--Editors: Andrew Langley, Paul Abelsky

To contact the reporters on this story: Alena Chechel in Moscow at achechel@bloomberg.net; Ekaterina Shatalova in Moscow at eshatalova@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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